Braley: it may be time for govt to buy GM

Congress may vote this week on a bailout for Chrysler, Ford and General Motors — and Congressman Bruce Braley of Waterloo says the automakers have "come a long way" in trying to sort out of some of the problems of the past. "But if you look at the sheer numbers and what they’re asking for, they’re asking for more than the book value of those corporations right now," Braley says. "And if that’s the case then I think American taxpayers have a right to demand strict accountability, an ownership stake in those companies, and a complete change in the corporate philosophy of how they’re going to go about doing their business."

Braley, who is a lawyer, suggests it’s not unreasonable for congress to consider buying General Motors."If you could buy General Motors based on their book value of $2.8 billion today and turn that over into some type of an employee ownership program, which many corporations in Iowa have done successfully, maybe you provide the incentive to those employees to take steps to make that industry profitable and start to turn around the direction of that company," Braley says.

The Bush Administration and congressional leaders are negotiating the terms of a Detroit bailout. The White House is pushing for tougher consequences for the automakers should they fail to bring production costs under control. Braley expects action of some sort before year’s end to at least provide short-term aid to the struggling American automakers. "I don’t think there is any doubt the domestic auto industry is a huge part of our economy, our domestic economy and that’s why everyone in this country should be concerned about what’s going on," Braley says.

The industry has made progress in some areas, according to Braley, but he wants to see higher safety standards and an increase in the fuel efficiency of American-made vehicles. The president of the United Auto Workers has asked that his union be given an ownership stake in General Motors, if the union agrees to pay and benefit cuts. Braley, a Democrat, says the U.A.W. has already made sacrifices. "You know, we passed $25 billion of assistance in 2008 that was tied to promoting the use of hybrid vehicles and part of the retooling process of this industry," Braley says. "That money has not been released yet by the Bush administration which wants to use that money for the bailout."

Braley made his comments on Iowa Public Television. Today Braley is among members of the House Oversight Committee who are questioning executives of Fannie Mae and Freddie Mac about the mortgage crisis.